Making Money from Different Sales Tax

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Speaking about different sales tax, I also remember an interesting experience I had one time when I bought something from Macys’ (department store) from another state and returned the product in Orange County that I want to share.

I don’t quite remember what it was that I bought, but when I returned the product to Macys’, the cashier actually gave me more money than I’ve bought it for. I remember asking why there was a discrepancy and the manager came over to explain that they had to return the product in their own state’s tax laws. Since I bought the merchandise at a lower sales tax state, I was making money off this purchase as I paid a lower sales tax originally and got more money back on the return.

So if every store does this, I can theoretically make money because I can always buy something from a lower sales tax state and return it when I’m back in Southern California. I could call this side business and the only problem I would need to figure out was how I was going to report the income to the IRS. J

Now, I have a bit of a moral issue with doing this of course, because I feel like it’s a little bit like cheating. This is obviously a loophole in the system that I would be exploiting, and I’m sure that it was never addressed because there aren’t that many people that will do something like this. On the other hand however, how is this different than buying a product at a lower price and selling it on Ebay?

At the end of the day, I don’t think I’m going to be doing this (I would already be doing this for the past few years if I thought it was morally right and probably be rich by now) but what does everyone think? Now that you’ve heard about this borderline scam type of business idea, would you pursue it? What if someone you know is doing this? What do you think of that person?

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  • Auto insure says:

    I really surprised to hear this sales tax is reduced in this modern world. But some business tacs was hidden. you can buy more products and make money but ensure other people ideas..

  • Findgascards says:

    I’ve never heard of this concept before but I’m curious if anyone out there does this because it does seem like you can make a pretty decent pile of cash from doing this.

  • Mike Huang says:

    It really would be a hassle to purchase and then return, but if you have friends in diferent states, you guys could do this on electronics 😛


  • Bank CD Rates says:

    It seems that the expense of doing this would also be a deterrant. Whether it be shipping charges between states or driving.

    Of course you can save sales taxes quite often by purchasing on-line. Well at least for now.

  • Paul | says:

    My guess is that if you did that too often, they’d realize what was happening and put a stop to it somehow – not sure how, but if too many people used that as a business model, you can be sure that stores would come up with something.

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